31/05/2011 (Financial Times) - Wrangling over the long-awaited global trademark for sustainable palm oil – which is being launched on Tuesday – has resulted in watered-down definitions of the word “sustainable”.

At one extreme, packets of biscuits or fish fingers labelled as “mixed” may contain no sustainable oil at all.

Palm oil goes into about half of all packaged goods sold in supermarkets. The trademark is designed to reassure consumers, who are increasingly concerned about forests being ripped up to clear the way for palm plantations – unleashing greenhouse gases and destroying the livelihoods of local communities and wildlife.

This, in turn, has forced food producers such as Unilever, the world’s biggest buyer of palm oil, and Nestlé to promote more sustainable and less damaging practices. The Roundtable on Sustainable Palm Oil, set up by the industry and other stakeholders with this aim, unveiled plans last year to develop a trademark. Officials envisage it will start appearing on products later this year.

However, critics say the trademark may confuse rather than reassure the average shopper. Products such as chocolate or cakes, stamped as containing sustainable palm oil, will be allowed to include up to 25 per cent non-sustainable oil under RSPO rules. Those labelled “mixed” may, in some cases, contain no sustainable oil.

The RSPO has defended the dilution of definitions as “a temporary stopgap measure”.

“We have been working on this for a long time,” said a spokesman. “People are pulling on many sides. Some people want a perfect system and some want what consumers understand, and these are two different things.

“We have to find the balance and that’s what this whole structure has been designed to do.”

Producers of sustainable oil have criticised the dilution of meaning.

“In our view it’s better to have a trademark that companies need to want to reach for, rather than have something that’s the lowest common denominator, and it therefore devalues the whole process,” said Alan Chaytor, executive director of New Britain Palm Oil, a sustainable producer.

Discussions originally centred on a 95 per cent cut-off for sustainable segregated palm oil, which has not been mixed with unsustainable oils at any point of the long and complex supply chain.

That was lowered to 75 per cent, the RSPO says, “because we would run the risk of no company being able to use the trademark” if they required harder-to-obtain palm oil derivatives.

Companies using 75 per cent will be able to top up the remainder using offset certificates, sold by palm oil producers who have produced a matching amount of palm oil.

Use of these GreenPalm certificates has already stirred controversy. Plantation owners and pressure groups say the certificates, which trade at low levels of $3 to $8 per tonne compared with physical palm oil at around $1,100 a tonne, do not provide sufficient incentive to farmers to produce sustainable oil.

“Mixed” oil is known as “mass balance” and means segregated sustainable oil has been mingled with non-sustainable oil at some point in the supply chain. That definition has also been diluted, and can now include wholly unsustainable palm oil derivatives which are harder to obtain, as long as the company offsets it by using sustainable palm oil elsewhere.

“The RSPO wants to get rid of ‘mass balance’ at some point. It’s all about how do you transform this market,” said the organisation’s spokesman.